A motorboat cruises past the white "bathtub ring" at Lake Mead near Hoover Dam Wednesday. The ring marks the steep decline in the lake's water level, which is the result of a drought that is prompting new shortage rules for the Colorado River system. Photo by John Gurzinski.

A sweeping interstate agreement that could help double the local water supply won the approval of the Southern Nevada Water Authority Board on Thursday.

The agreement, which is on track for federal approval by the end of the year, lays out new rules for how shortages on the Colorado River should be shared during long dry spells.

The rules were first proposed by the seven Colorado River states last February and are now under review by the U.S. Department of Interior.

After Thursday's vote, Water Authority General Manager Pat Mulroy summed up the agreement in three words: "This is it."

Provisions in the agreement clear the way for Southern Nevada to roughly double its water supply through a variety of projects and regulatory changes over the next two decades, Mulroy said.

One key provision would allow the state to collect credits for the rural Nevada groundwater that Mulroy's agency plans to use in the Las Vegas Valley and release back into Lake Mead as treated wastewater.

Those credits would allow the water authority to almost double the number of people it can serve with its $2 billion pipeline project.

The agreement also allows Nevada to receive a greater share of Colorado River water, including permanent access to 75,000 acre-feet a year and a one-time infusion of at least 280,000 acre-feet in exchange for building a new reservoir in California near the U.S.-Mexico border.

An acre-foot is enough water to support two Las Vegas Valley homes for one year.

County commissioner and water authority board member Rory Reid said Mulroy and her staff deserve a lot of credit for their work in hammering out the deal.

"I don't know if I could get seven neighbors in my homeowner's association to agree on something," Reid said. "They're getting seven states to agree on something very important to Southern Nevada."

Also Thursday, board members approved a related agreement with Arizona that spells out how much water Nevada will have to give up should a shortage be declared.

If the water level at Lake Mead drops 50 feet from its present elevation of 1,126 feet above sea level, for example, Nevada would see its annual share of the river cut by 13,000 acre-feet.

A 100-foot decline at Lake Mead would result in a 20,000 acre-foot cut.

The authority expects to be able to cover such shortages, should they occur, using water reserves it has banked in Arizona and elsewhere. According to recent federal projections, the water level at Lake Mead is expected to remain safely above 1,100 feet through December 2008.

Under the deal with Arizona, which Mulroy called "the heart of all the other agreements" on the river, the authority will pay Arizona $8 million in exchange for a reduced share of any shortage.

Mulroy said the payment represents a compromise. When negotiations between the two states began, Arizona water officials wanted Nevada to accept a 15 percent share of any shortage while Nevada officials argued for "zero percent," she said.

Arizona will keep the money even if a shortage is never declared on the river.

The larger agreement, meanwhile, essentially turns Lake Mead into a bank account for Nevada, Arizona and California, allowing the states to buy water from farmers and store it in the lake for future use.

The seven states that share the river also agreed to allow the joint operation of Lake Mead and Lake Powell to protect water supplies in Colorado, New Mexico, Utah and Wyoming.

Most provisions of the agreement would apply through 2025.

Rules already exist governing the operation of the Colorado during normal and high-water years.

"Keep in mind, no shortage rules have ever been implemented on this river," said John Entsminger, deputy counsel for the water authority.

"We've never had a more holistic strategy like this before."

But work on the new rules for the river is far from finished, Mulroy said.

"One of the key elements out there that is left to be resolved is the country of Mexico's share of the shortage," she said.

The interstate agreement approved Thursday assumes that Mexico will be made to accept 17 percent of any shortage, an amount roughly equal to its overall share of the river.

Official talks between the U.S. and Mexico over the Colorado River reportedly have not progressed far.